Energy policies and climate change Is Europe taking the lead? EFTA - PowerPoint PPT Presentation

Energy policies and climate change Is Europe taking the lead? EFTA Seminar on the EEA – Spring 2008 Óttar Freyr Gíslason The EFTA Secretariat

The overall objective • The overall objective is to prevent massive and irreversible disruption of the global climate system. This means limiting global warming to no more than 2°C above the temperature in pre-industrial times. • Energy security

Emission reduction needed • Developed countries need to reduce their emission of greenhouse gasses (GHG) 30% below 1990 levels by 2020. • But even greater GHG emission reductions are necessary after 2020 if the 2°C target is to be met: – Developed countries: 60-80% emission reduction by 2050. – Developing countries will also have to set emission targets.

The EU Climate and Renewable Energy Package • 20% GHG emission reduction by 2020 compared to 1990 ( -6.5%) The EU Kyoto target (2008-2012) is 8%. • 30% GHG emission reduction by 2020 compared to 1990 . In the context of international agreement. • 20% share of renewable energy of final energy consumption by 2020. • 10% binding target in transport by 2020– often discussed in relation to biofuel. • 20% increased energy efficiency by 2020.

The EU 20% GHG emission target GHG Target: -20% com pared to 1990 -14% com pared to 2005 EU ETS Non ETS sectors -21% com pared -10% com pared to 2005 to 2005 27 Mem ber State targets, stretching from -20% to +20%

The EEA EFTA states • The EEA EFTA states participate in the EU Emission Trading Scheme (ETS) through the EEA Agreement. – Large industrial emitters: the power sector, oil refineries, iron & steel plants, cement, glass, pulp and paper. – Revised ETS will include: Aviation, chemical and aluminium sectors. • Still to conclude if the revised ETS scheme, the renewable energy targets and the energy efficiency target fall under the scope of the EEA Agreement.

The EEA EFTA states • Norway Kyoto target: 1%. Post Kyoto target: 30% GHG emission reduction by 2020 & Carbon neutral by 2030. • Iceland Kyoto target: 10%. Post Kyoto target: 50-75% GHG emission reduction by 2050. • Liechtenstein Kyoto target: - 8%. No post-Kyoto target so far.

Is Europe taking the lead? • The United States (20%) Kyoto target: - 7%. GHG emission increased more than 16%. Have not ratified the Kyoto Protocol and no post-Kyoto targets so far. • Japan (5%) Kyoto target: - 6%. GHG emission increased more than 8%. Post Kyoto target: To reduce GHG emissions by 60-80% by 2050. • Canada (2%) Kyoto target: - 5%. GHG emission increased more than 25%. No post-Kyoto targets so far.

Is Europe taking the lead? • Russia (5%) Did not face mandatory cuts since its GHG emissions fell below the 1990 baseline due to a drop in economic output. No post-Kyoto targets so far. • Large GHG emitters among the developing countries: – China (20%) – India (5%) – Brazil (3%) – South Africa (1%) – South Korea (1%) • One thing is certain, the 2°C target will not be met if only Europe (13%) is putting forward a strong post Kyoto commitment.

Is Europe taking the lead? Yes But is Europe on the right track ? • 20 - 30% GHG emission reduction by 2020 vs. 60-80% by 2050 – Policies tend to take time to implement. – NGOs arguing that the 2°C target demands 100% GHG reduction for developed countries by 2050 and 80% for developing countries.

Is Europe taking the lead? • Raising the target to 30% is to be met with an increased amount of emission reduction credits acquired through investments in developing countries. – Critics argue that the target should be met through emission reductions within the EU and any external credits should come on top of a total 30% domestic emission reduction. – On the other hand, this is a strong incentive for developing countries to participate in a post-Kyoto agreement. • 20% increased energy efficiency by 2020. – Not a legally binding target and therefore bound to fail.

Is Europe taking the lead? • 10% binding target in transport by 2020 – biofuel – Concerns if it really results in GHG emission reduction. – Concerns over the sustainability of the biofuel policy and its environmental and social impacts. – Biomass could be more efficiently used for electricity and heat production, rather than to fuel high-consumption cars. • Finally, we are yet to see if the EU will be delivering a strong Climate and Renewable Energy Package…or if the proposal will be watered down during the political process.

THANK YOU

What is the Commission proposing? • Reduction of at least 20% in the emission of greenhouse gases by 2020 compared to 1990 levels and the objective of a 30% reduction by 2020, subject to the conclusion of a international climate change agreement. – Amending the EU Emissions Trading Directive (EU ETS); – Establishing the sharing of efforts to meet the Community's greenhouse gas reduction commitment in sectors not covered by the EU emissions trading system; – A Directive promoting renewable energy, to help achieve both of the above emissions targets.

Amending the EU Emissions Trading Directive (EU ETS) • The ETS is the cornerstone of the EU's strategy for fighting climate change. It's aim is to help States achieve their commitments to reduce greenhouse gas emissions in a cost-effective way. • It applies to the 27 EU Member States, as well as Norway, Iceland and Liechtenstein (Three phases: 2005-2007, 2008-2012, 2013-2020). • It currently covers over 10,000 installations in the energy and industrial sectors (oil refineries, iron and steel plants, factories making cement, glass, pulp and paper) which are collectively responsible for close to half of the EU's emissions of CO2 and 40% of its total greenhouse gas emissions. • The ETS is a 'cap and trade' system, that is to say it caps the overall level of emissions allowed but, within that limit, allows participants in the system to buy and sell allowances as they require.

What are the main changes proposed to the ETS • There will be one EU-wide cap on the number of emission allowances instead of 27 national caps. • A number of new industries (e.g. petrochemicals, aluminum and ammonia producers) will be included in the ETS; as well as two new gases (nitrous oxide and perfluorocarbons). • A much larger share of allowances will be auctioned instead of allocated free of charge (60% in 2013 compared to 10% in 2008). • Member States will be allowed to exclude small installations from the scope of the system, provided they are subject to equivalent emission reduction measures (Less the 10.000 tonnes of CO2 per year). • Discussions are already under way on legislation to bring the aviation sector into the system from 2011.

Sharing of efforts • How the 20% greenhouse gas target is shared between sectors and Member States • The total effort for greenhouse gas reduction needs to be divided between the ETS sectors and non-ETS sectors: – A 21% reduction in ETS sector (40% of the total) emissions compared to 2005 by 2020; – A reduction of around 10% compared to 2005 for the sectors that are not covered by the ETS (60% of the total). • Taken together, this results in an overall reduction of 14% compared to 2005, which is equivalent to a reduction of 20% compared to 1990. • A larger reduction is required of the EU ETS sector because it is cheaper to reduce emissions in the ETS sectors than in most other sectors.

Sharing of efforts • The sharing of greenhouse gas reduction efforts between Member States is therefore determined solely for sectors not covered by the EU ETS. • These sectors are made up of small-scale emitters in a wide range of sectors: – Transport (cars, trucks) – Buildings (in particular heating) – Services – Small industrial installations – Agriculture – Waste • They currently represent some 60% of total GHG emissions in the EU. • It will be left to Member States to define and implement policies and measures in these sectors.

Sharing of efforts Denmark -20% Portugal 1% Ireland -20% Malta 5% Luxembourg -20% Slovenia 4% Sweden -17% Czech Republic 9% Austria -16% Estonia 11% Finland -16% Hungary 10% Netherlands -16% Slovakia 13% United Kingdom -16% Poland 14% Belgium -15% Lithuania 15% France -14% Latvia 17% Germany -14% Romania 19% Italy -13% Bulgaria 20% Spain -10% Greece -4% Cyprus -5% Greenhouse gas emission limits by 2020 compared to 2005 – For non-ETS sectors